Fascinating story today out of St. John’s, where Newfoundland and Labrador premier Kathy Dunderdale told a business lunch that a deal to announce a federal loan guarantee for Muskrat Falls almost fell apart last November when Harper demanded she deregulate the province’s fish-processing industry in return for the favour. In one of a few versions of the story, she slammed the phone down on Nigel Wright, then Harper’s chief of staff, rather than accede to the demand.
Dunderdale’s version is obviously self-serving — she positions herself as a defender of Newfoundland and Labrador fish-processing plants against bullies in Ottawa and Brussels who would take them away — but a source familiar with the federal position on these last-minute negotiations tells me her version is broadly accurate.
What’s striking is that the deregulation Dunderdale was asked to agree to was demanded by Harper’s PMO as part of the CETA negotiations with Europe. The second-largest provincial delegation at Canada-EU negotiations has often been Newfoundland’s, as the province has long been wary, under Dunderdale and her predecessor Danny Williams, about big trans-atlantic competition for the province’s fishery.
This excellent feature, written at the time by the Halifax Chronicle Herald’s Paul McLeod, will remind you how wild the home-stretch negotiations were.
At The Chronicle Herald we had already put our story on the Friday announcement to bed, confident because we had confirmed the event through multiple, unrelated sources.
Then our sources started calling us back. The deal was off.Finally the deal was back on, and Harper flew out East to make the announcement.
So here’s what’s striking. First, that the PMO tried to add a condition to the PM’s appearance — to make it the condition of his presence — and, when rebuffed, blinked and followed through on the announcement anyway. Bluffers rarely have their bluffs called. When they do the results are sometimes surprising.
Second, that the PM’s chief of staff was brokering the deal. This used to be the business of intergovernmental-affairs ministers, but Harper hasn’t had one of those worth mentioning since Mike Chong quit in 2006. A lot of power on these fast-moving files is concentrated in, basically, one guy. Who incidentally just quit.
Third, that Wright was trying to herd the provinces to get a CETA deal six months ago and that the specific bone of contention remains outstanding. If CETA was Wright’s file, if his purported legendary touch on trade issues hit a speed bump this big, and if half a year has gone by since then, and if Wright’s gone now, then one starts to think CETA isn’t going great.
But note that in McLeod’s article Harper actually talks about the timing of the Muskrat Falls announcement, which came all of four days after the federal cabinet signed off on the loan guarantee.
“Let me be frank about this. Our view is we worked on it for a long time but that once we concluded it we wanted to make the announcement quickly,” said Harper.
“It’s a very big deal, and as leaders, we want to announce what is done, not wait for other people to leak it out for us.”
The same modus operandi would have CETA continuing to look like a mess until just before, or just after, Harper attends the G8 in Northern Ireland on June 17-18. He would either complete the deal in time to announce it at the summit, or crunch it with European officials at the summit and announce it somewhere else, days later. Hell if I know.
But if we get to the end of June and there’s no deal, it’s going to start to look like Wright’s ability to work magic on trade files started to fall apart last November at Muskrat Falls.